Challenges and opportunities of EU ETS Phase III

Challenges and opportunities of EU ETS Phase III European Economic Congress Przemysław Sikora, KASHUE-KOBIZE Senior Policy analyst Katowice, 18 Mai 2011 r.

Main topics Allocation rules and carbon leakage Derogation for power sector; Roadmap 2050 – low carbon economy

Allocation rules phase III Lack of fuel specificity when setting the benchmarks; Quality of raw materials is not included as well; Sectors deemed to be in danger: pulp and paper, production of chemicals, heating sector; Lack of time for adaptation to new rules; Possibility of distortion of competition Carbon leakage: both internal in the EU and external outside the EU.

Derogation in power sector Certain MS can use derogation from 100% auctioning of allowances for power sector; March 2011 – EC published guidlines but still there are bilateral talks; Need for setting The National Investment Plan; Problem: use of free allowances in the best effective way providing a fast move towards low emissions power sector in certain MS.

Roadmap 2050 Strategic document providing a switch for a low carbon economy in Europe in 2050; Efective use of ressources; Identification of reduction potential; Need for further analysys both at the MS level and also at sectoral level; Unknown links with Energy Roadmap 2050.

Thank you for your attention! Przemysław Sikora Strategic Department Krajowy Administrator Systemu Handlu Uprawnieniami do Emisji Krajowy Ośrodek Bilansowania i Zarządzania Emisjami Kontakt: przemysław. sikora@kobize. pl Tel: 22 -56 -96 -577